This review article discusses the major cellular and molecular responses characterizing pulmonary adaptation to cadmium (Cd) that may ultimately contribute to Cd carcinogenesis. Hallmarks of Cd adaptation include hyperplasia and hypertrophy of type II alveolar epithelial stem cells, an inflammatory response involving polymorphonuclear leukocytes, and the increased gene and protein expression of several resistance factors. The most prominent biochemical change is associated with Cd-induced up-regulation of metallothionein, a cysteine-rich, metal-binding protein that sequesters Cd and also possesses considerable free radical scavenging ability. Increased levels of glutathione (GSH) and induction of enzymes involved with both the synthesis of GSH (gamma-glutamylcysteine synthetase regulatory and catalytic subunits) and its metabolism (GSH S-transferases) also constitute important components of the pulmonary adaptive response. Enhancement of several important cellular defense systems in response to Cd exposure may, at first, appear to be beneficial. However, recent evidence suggests that the Cd-adaptive phenotype could have deleterious consequences and may represent a double-edged sword. It has been discovered that Cd-adapted alveolar epithelial cells have a reduced ability to repair DNA damage due, in part, to the inhibition of two base excision repair enzymes (8-oxoguanine-DNA glycosylase and endonuclease III). Cells with genetic aberrations resulting from unrepaired DNA lesions would normally be removed from the lung by apoptosis. However, another study has demonstrated that apoptotic cell death, following an oxidant challenge, is significantly attenuated in Cd-adapted cells compared to non-adapted counterparts. Suppressed apoptosis could leave pre-neoplastic or neoplastic cells alive, favor their clonal expansion, and ultimately promote tumor development. The presence of superior antioxidant defenses would also be expected to increase the resistance of these tumors to chemotherapeutic agents.